The barrages of homemade Grad rockets and Iranian produced Fajr-5s that were fired by Tehran’s proxy Hamas and Islamic Jihad militias at Israeli population centers in southern and central Israel during the recent fighting were reportedly not only meant to kill and maim civilians but also to wreck Israel’s economy. The militias’ goal was to exact revenge on Israel, the U.S. and the EU for the stifling sanctions imposed on the Iranian regime.

Prior to the relentless rocket attacks on Sderot, Beersheba, Ashkelon and Ashdod, among other towns and cities, Israel’s Ministry of Finance said that despite a significant slowdown in various exports due to the EU’s ongoing recession, the Israeli economy was growing at a higher rate than the economies of the U.S., UK and EU. In addition, Israel’s foreign tourism industry was in the midst of its best year ever, with close to three million tourists having booked trips through the first quarter of 2013.

Several days after Fajr-5s were fired at Tel Aviv and Jerusalem, an Israeli Hotel Association executive told an Israeli business news site, “[It is] time to write off the winter season.” Sources say that a significant number of Christian groups canceled their pilgrimage missions planned for the forthcoming holiday season, while bookings from foreign individual tourists for the December-January winter vacation respite were down by nearly 25 percent. During a meeting of tourism industry leaders last Thursday, Israel Ministry of Tourism (IMOT) representatives said that, “The damage could be minimized, and it was estimated that the potential for rehabilitation is large in relation to other crises the industry has dealt with.”

The IMOT representatives stressed the urgency to implement rehabilitative actions because the tourism industry, unlike other industries, is highly unlikely to retrieve much of its lost revenue. They also said that a return to normalcy after the fighting is a crucial incentive for future tourists to visit Israel, thus enhancing the tourism industry’s ability to increase its profit margin. According to the IMOT, The Federation of Israeli Tourist Organizations has pledged to contact organizations that have canceled trips in an attempt to have them rescind their cancellations.

Tel Aviv, the headquarters of many of Israel’s major business entities (including the country’s stock exchange and a number of hi-tech and real-estate companies), was also battered during the past two weeks. Israel’s leading business dailies, Globes and Calcalist, reported that many foreign investors had stopped investing in the Israeli economy. This was especially so in the real-estate sector, as many foreign Jewish investors from Russia, France and the U.S. had been purchasing properties in a number of affluent Tel Aviv residential and commercial projects. The startling pictures of a severely damaged apartment building in West Rishon LeZion, less than five miles from Tel Aviv, in the aftermath of a Fajr-5 strike sent shudders throughout the Israeli real-estate marketplace. The damage to the relatively new building was estimated at nearly $1.5 million.

According to Israel’s Tax Authority, the overall indirect damage (loss of work and production) to the Israeli economy as a result of Operation Pillar of Defense is estimated at $100 million. But senior economists told Globes that when all of the damages are factored in, including damages to homes, infrastructure and tourism, the loss to the Israeli economy could approach $500 million.

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